Group buying, also known as collective buying, offers products and services at significantly reduced prices on the condition that a minimum number of buyers make the purchase.
Typically, group buying websites negotiate a discount with a merchant or vendor of goods or services in exchange for a promise to deliver a higher volume of sales. For example, a merchant may agree to reduce the price of their product by 50 percent if they can be guaranteed at least 200 customers. In this case, potential purchaser could then offer to buy the merchant's product through a group website for the reduced price, and when 200 potential purchasers have accumulated, the “deal” would become active, resulting in at least 200 customers for merchant and a 50 percent savings for each of the customers.
One of the problems with existing group buying technology is that it does not work in real-time and is dependent on buyers getting together in order to buy a product. For example, in order to trigger a deal and make a discount available, a certain minimum number of potential buyers must opt-in. If this minimum number is not reached, then the deal is not triggered and the group purchase does not take place.
Another problem with existing group buying technology is that there is no way for a seller to adjust prices of an item once a particular deal has been made public, so they must offer steep discounts upfront in order to incentivize purchases by buyers. Once the minimum number of buyers is reached for a particular deal, the seller is usually locked into the deal sell price they previously agreed to, regardless of whether the item sells just 1 unit more than the minimum or 1,000 units more than the minimum. Additionally, since the transaction processing fees charged by group buying websites can be quite significant, sellers are frequently put in the position of achieving very minimal gains or incurring losses when the number of units sold is not significantly above the minimum.
Accordingly, improved systems and methods for group buying are needed which do not present as much risk for sellers and which allow for greater flexibility when performing group buying.